Wednesday, July 30, 2008

Citing growth in managed solutions, broadband and convergence revenue, BT reported quarterly revenue of 5,177 million pounds, up 3 percent. EBITDA before specific items and leaver costs increased by 1 percent year on year. Earnings per share before specific items and leaver costs increased by 2 percent to 6.1 pence.

Some highlights:

BT reached 13.0 million wholesale broadband connections (DSL and LLU) at June 30, 2008, including 4.8 million local loop unbundled lines. This represents an increase of 1.8 million wholesale broadband connections year on year. There were 338,000 net additional broadband connections in the quarter.

BT remain the UK's number one retail broadband provider with a customer base of 4.5 million at June 30, 2008, which represents a market share of 35 percent.

Managed solutions revenue grew by 21 per cent to 1,408 million pounds, and broadband and convergence revenue increased by 4 per cent to 640 million pounds. Managed solutions includes revenue from our networked IT services, managed network solutions and MPLS. Broadband and convergence revenue includes revenue from broadband, LLU, mobility and convergence solutions.

The growth in managed solutions was mainly due to 17 per cent growth in networked IT services and 36 per cent growth in MPLS revenue. This revenue growth in the quarter was partially offset by a 6 per cent decline in revenue from calls and lines to 1,647 million pounds, together with a 7 per cent decline in revenue from transit, conveyance, interconnect circuits, WLR, global carrier and other wholesale products to 827 million pounds.

Revenue from major corporate customers increased by 12 per cent to 1,961 million pounds, reflecting the increased take up of our networked IT services, the impact of foreign exchange and recent acquisitions by BT Global Services.

Revenue from our business customers (comprising smaller and medium sized UK businesses) grew by 5 per cent to 661 million pounds, continuing the recent trend.

Revenue from consumer customer segments of 1,228 million pounds was broadly flat year on year, with the impact of call package price reductions and a decline in calls revenue being offset by growth in broadband revenue. The 12 month rolling average revenue per consumer household increased by 4 pounds in the quarter to 278 pounds, reflecting the increasing number of customers taking multiple services from BT. Increased broadband revenue and the growth of value added propositions per household, have more than offset the lower call package prices in the quarter.

Wholesale (UK and global carrier) customer revenue decreased by 7 per cent to 1,320 million pounds as a result of the impact of volume and price reductions on DSL broadband and the decrease in low margin transit revenue and conveyance volumes, which was partially offset by growth in managed network solutions revenue, migrations to local loop unbundling (LLU) arrangements, and growth in global carrier revenue of 19 per cent.